Microsoft Signs 100,000-Ton Carbon Removal Deal with India's Varaha

Can AI growth and climate goals coexist? According to Reuters, Microsoft is betting on Indian soil to find the answer. The tech giant has signed a deal with New Delhi-based startup Varaha to purchase over 100,000 tons of carbon dioxide removal (CDR) credits through 2029.

Scaling Biochar: The Microsoft India Carbon Removal Varaha Deal

The project focuses on biochar, a charcoal-like material produced by heating agricultural waste—specifically cotton stalks—in the absence of oxygen. By turning waste that is usually burned into biochar, the project prevents air pollution and locks carbon in the soil for centuries.

Varaha plans to deploy 18 industrial reactors in the state of Maharashtra, involving approximately 40,000–45,000 smallholder farmers. Over its 15-year lifetime, the initiative is expected to remove more than 2 million tons of CO2.

The AI Emissions Paradox

Microsoft's hunger for AI has a cost. While the company aims to be carbon-negative by 2030, its total emissions rose 23.4% in fiscal year 2024 compared to a 2020 baseline. This surge is primarily driven by the expansion of energy-intensive data centers required for generative AI.